I didnt know this but when the fed ends QE, tbey never sell bonds/ treasuries, they merely let them mature and not replace them with new ones. I found that somewhat interesting.
The fed reserve and ending QE
- Thread starter Innervoice
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Where did you get this? First of all, QE is a very untested and new tool in their box. So, can't say they always or never because there hardly is a meaningful frame of reference. Secondly, they can easily reduce their balance sheet but for various reasons they have so far not done so by any meaningful amount. And this is everything that is wrong with this world today. If they were serious about inflation they would reduce their balance sheet. But in the world of virtue signaling raising interest rates is all that is needed to show the public they are doing something. Nobody in the public understands the Fed balance sheet anyway.
Argentina has been operating for decades like that. They have never recovered from Juan Peron's economic policies and lurch from one economic crisis to the next. The UK is on the same path. The US is not far behind. Data driven policies are complete nonsense which exacerbate the booms then the busts. It is based upon lags and leads which are impossible to pre-determine.
Well, in the past all those policies and the central banks were put in place to smoothen out booms and busts. But the elite has figured out that just with the right amount of lobbying that they can have it all, they basically bought policies to their liking in the pursuit to line their pocket at the expense of everyone else. Nowadays public policy exactly has the opposite effect, it amplifies booms and busts.
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LOL + i dont blame them;
they sold silver certs+ silver. Hard to keep up with the difference between Fed + US Treasury
Powell said in a recent interview that the fed does not sell treasuries/ bonds, they just let them expire
He did say they may sell some mortgage backed securities.
He did say they may sell some mortgage backed securities.
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I thought they were making a big mistake selling all thier silver some time ago;
but storage costs may have been a factor.
Amazing how much the metal dealers mark up Federal Reserve N/otes silver + silver certificates.
Asking internet price for 1957 [1] $1 silver cert=$2,000, but seller is willing to finance for $96.02 for 24 months/LOL
That is nonsense and completely taken out of context. If the will to reduce the balance sheet is there then securities are sold into the market, has happened all the times in the past.
We have to take into account that Argentina was forced to engage in real borrowing using bonds denominated in other countries (U.S. dollars for example) currencies. That is something the U.S. has (maybe) never had to do. The colonies borrowed from the French during the Revolutionary war. Not sure about the civil war. I don't think the U.S. did, but the Confederate States may have? Does anyone here know?
I am mainly concerned about a breakdown in the tax system, which L. R. Wray has posited as a fundamental cause of most hyperinflations. We don't need taxes to raise money to spend, but we sure do need them for other reasons. The substantial compression in the progressiveness of our tax structure since about 1982 may pose a danger to social stability and our democracy. It also may result in an unnecessarily high growth rate of total, outside U.S. Money in the World's economy with a consequent unacceptably high growth rate in bond servicing costs. The later is a non-discretionary federal budget item that when not met by sufficient taxation results in additional deficit. A little reflection on these considerations suggest that there may exist a positive feedback loop in deficit creation caused by inadequate tax rates and/or unnecessarily high spending. (Total outside money would include U.S. Bonds. In some models used by economists, bonds are considered as just another form that U.S. money can take.)
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At some point tobacco leaves were used as legal tender for tax purposes and when that news got out so much was grown that it caused inflationary pressures.